Examination of Witnesses (Questions 280
- 299)
280. The phrase "total extinguishment"
is often one that is used to describe this kind of situation,
is it not?
(Mr Smith) Yes.
281. I mention that just in case that phrase
is used later in the course of proceedings.
(Mr Smith) If we move on to the next slide please, we are
now on to residential and we are now looking at the likely payments
to a residential owner-occupier compulsorily acquired.[9]
Again, he will receive the open market value of his residence,
assessed again as described earlier. The sort of disturbance claims
that arise here are searching for new premises, adaptation of
soft furnishings to fit the new premises (say, if someone wants
particularly to take a carpet and they have to have it refitted),
utility reconnection costs which are a normal moving item, notification
of change of address, removal costs, stamp duty land tax on a
similar property, fees and costs, and the value for money argument
applies as previously described. In addition, a residential owner-occupier
will receive a home loss payment up to a maximum of £44,000
in addition to any compensation payable for the value of the land
or disturbance. That gives an idea of what a residential occupier
will receive.
282. BARONESS FOOKES: Just before we
move on, you mentioned the adaptation of soft furnishings, but
very often in practice it means new curtains, new carpets, et
cetera, rather than adapting your old carpets for a new place.
Would that be included in that or not?
(Mr Smith) Not normally. What would normally be done in those
circumstances is that a value would be ascribed to the existing.
If an owner is not taking curtains and carpets with them, then
a value will be ascribed to that in addition to the value of the
property.
283. So you could then use the money to purchase?
(Mr Smith) To help purchase, absolutely. We are now moving
on to where a residential tenant is in occupation of a property
that is compulsorily acquired.[10]
These are normally held these days on a shorthold tenancy probably
for about a year or up to a year and normally there would be no
value paid for that tenancy as it is merely a short agreement
and the occupier is paying full rent, but in addition he would
get normal disturbance costs which are shown here. They are very
similar to the costs that apply to owner-occupiers. You will note
that the home loss payment for tenancies is less at £4,400
rather than a maximum of £44,000. Just very quickly, some
sites have development value, so there are just a couple of points
we need to raise here. Firstly, an owner will receive the market
value of his interest, the higher of redevelopment or existing
use value, and, to explain this, it cannot be both because in
the case which Mr Mould referred to where a farm was basically
being acquired, but it was allocated for redevelopment, in that
case, Horn v Sunderland, the claimant asked for disturbance
costs to the farm in addition to the redevelopment value and it
was held that, where someone is selling their property for redevelopment,
implicit in that is an acknowledgement that their occupation will
be disturbed because obviously, if the property is going to be
demolished, they will be disturbed. Therefore, disturbance is
not payable on redevelopment, so it is either redevelopment or
existing use plus disturbance. In assessing development value,
all I can say is that the statutes lay down rather complicated
statutory planning assumptions which surveyors have to take into
account. I think that they can be best described as the fact that
we should ignore any change in value due only to the scheme and
I think that, if that is the principle, then it is the one that
is easiest to follow without getting into all the details. This
can easily be described where you do not want to pay somebody
less because a property is blighted, but you do not want also
to pay them more just because the scheme may increase the value.
There is a celebrated case which happened in Trinidad actually,
it was called the Pointe Gourde case where the Government
wanted to build a naval base and, therefore, wanted to acquire
a quarry. The owners of the quarry said, "Oh, that's good.
We'll make a lot more money now you want to build a naval base
than we would otherwise" because this quarry was almost disused.
What was held was that the quarry had a value and they had to
be compensated for it, but that extra value element that was due
to the profits that would be made to construct the naval base
which was the scheme was not allowable. In other cases, sometimes
highways give access to land which opens it up to development,
so, if somebody has land which has increased in value just because
of the scheme, that is not allowable. As I have said, it is all
equivalence; we ignore the decrease and we ignore the increase
due to the scheme.
284. LORD BROOKE OF ALVERTHORPE: Could
I ask if you know the number of cases that fall into each of these
categories that we are examining so far?
285. MR MOULD: The honest answer is no,
I cannot give you a figure. Broadly, these sites, Mr Smith, please
correct me if I am wrong, are sites which, in the absence of Crossrail,
would be identified as having development potential and, is this
right, would generally be commercial rather than residential properties?[11]
(Mr Smith) They would be commercial, yes.
286. So they would fall within that figure of,
I think you said, about 100-odd commercial properties which are
earmarked for acquisition?
(Mr Smith) Not all of those will have development potential.
287. LORD BROOKE OF ALVERTHORPE: I am
just trying to get in my head the scale of the problem that we
might have in each category and the extent to which we will have
to focus our attention on the bigger ones rather than the smaller
ones, if we have to in fact focus our attention.
288. MR MOULD: We have tried to identify
categories where, on the basis of the Petitions that we have seen
obviously, you can expect some debate and I hope that helps, so
we are trying, as it were, to give you a little foretaste of some
of the points or the background, if you like, the context in which
those cases might have to be considered. Whether that in fact
is the case when we come to hear those Petitions, we obviously
will have to see.
(Mr Smith) I now move to a quick explanation where part only
of a property is acquired, for example, a forecourt, parking space
or some land is acquired for the scheme, but other parts are retained
by the owner. In particular, this may apply with Crossrail where
we acquire subsoil land for tunnels. In these cases, part only
of the land is acquired, so the market value of the land acquired
is assessed, but, in addition to that market value that we have
already discussed, the owner is entitled to the depreciation to
the retained land which may be due to the scheme.[12]
Therefore, if, for example, the property retained is worth less
because of the impact of the scheme, that depreciation is also
payable in compensation. Going back to equivalence, the owner
should be put in the same position before and after. There are
very rare cases where the public works actually give betterment,
as I have referred to. They are rare and I do not think there
will be any of those coming up, but I only put it there because
it is equivalence. In addition, where part only of the land is
acquired, the owner is entitled to disturbance and other losses,
and the valuation date is the same; it is when Crossrail will
enter upon the land.
289. BARONESS FOOKES: I probably ought
to know this, but in property law how deep does ownership go?
I had never thought of it before, except that we are now having
deep tunnels.
(Mr Smith)
I think the answer is that you buy to the centre of the earth.
It is rather hot, I think, if you do!
290. MR MOULD: And up to the heavens!
(Mr Smith)
I will come on to subsoil in a minute.
291. CHAIRMAN: In this context, Mr Smith,
the disturbance would include, would it, say, a necessity to put
in double-glazing?
(Mr Smith) Yes, it could do. Yes, that would be a mitigation
measure to try and reduce it, yes, quite right. If we now move
to where a part only of land is acquired, what we call `material
detriment', where part only is acquired, but the remaining premises
of the owner are affected in such a way that there is a material
loss to the retained land or a material impact to the future use
and enjoyment of that property, and this can arise from construction
or use, then the whole property can be acquired under compulsory
purchase where an applicant so requires and can make a case.[13]
The test here as laid down by the Lands Tribunal is not necessarily
the extent of land that the acquiring owner buys, but the impact
of the scheme on the retained property. If we think back to equivalence,
if it is so affected that it just cannot continue reasonably,
then this occurs and there is an example that we will come on
to here, but I just want to emphasise that, where we are buying
land, what we call `subsoil', and this is land lower than 9 metres
for tunnels, so we are 30 feet down, these provisions do not apply
to those. Broadly speaking, those owners can get the depreciation
in the value of their retained land, but they cannot ask the acquiring
authority to buy the whole property. This has been a precedent
that has been set in railway bills for as long as I have known
and well before then. I think it does arise because, firstly,
where there are deep tunnels, especially if you look across London,
in many cases there is very, very little impact on value anyway
and in any case, when historically railway authorities have built
new schemes, they have agreed to pay the damage of settlement
that they may cause if and when they tunnel. If that does arise,
they have agreed to repay that damage, so I think, taking all
of that into account, that describes why there is this precedent,
but I thought I ought to make it clear to your Lordships that
that is the case.
292. CHAIRMAN: Leaving aside the subsoil
for the moment, the rest of this process is effectively a reverse
compulsory purchase, is it not?
(Mr Smith) Yes, it is.
293. And it can be contested?
(Mr Smith) It can be contested, that is true. If I may move
on, there is one case here and I should make it clear that there
is a property here at 20 Moorfields. There are some Petitioners
that own this property and they have applied to have the material
detriment provisions applied to this property. Crossrail has acceded
to their request, hence I am raising it here. There may be other
parts of their Petition that may come before your Lordships which
I will not want to refer to because that would be wrong, but I
just want to show you an example because I think it helps.[14]
Here we have a property, 21 Moorfields, shown outlined in red.
It is above Moorgate Tube Station and in front of it is a property,
100 Moorgate, which will also be demolished and that will be part
of the Liverpool Street west ticket hall. Also, there will be
works in the street here to build the ticket hall. You will see
in red the property and hatched red is the area required for Crossrail,
probably no more than 5 or 7 per cent of the whole.[15]
However, this is required to be demolished to construct the works
and, if we can move to the next slide, it requires the demolition
of part of the front office block and making that good and also
it requires a new access to the whole of the office centre here
which is over 100,000 square feet of offices.[16]
Those premises are accepted by Crossrail to be materially affected
by the scheme and, therefore, we have not waited for a claim to
be made, but we have agreed with the Petitioner upfront that we
will buy this whole property. I thought it useful just to show
as an example.[17]
Moving on to subsoil, broadly speaking, subsoil is described as
land beneath 9 metres. If one can imagine that there will be tunnels
going across London at quite considerable depths, but generally
more than 9 metres, they have to miss foundations, other Tube
lines, sewers and everything else. Generally speaking, an owner
just having subsoil acquired from him will receive the market
value of that strip of subsoil. However, it is generally a nominal
value only because there is no general market for strips of subsoil,
but, as described to you before, in addition he will receive any
reduction to his retained property from either construction or
use of the scheme. Obviously Crossrail will seek to reduce the
impact on properties generally through mitigation measures, so
the way forward is to design those out as far as is reasonably
practicable at the front end. You have already heard about the
noise policy yesterday. There is a Code of Construction Practice
which covers the proper management of the construction sites.
There is a Crossrail settlement policy which I believe will be
presented to you and that covers proper monitoring and repair
of settlement if it does occur. All these are taken into account
in the compensation assessment, so they can receive reduction,
but we hope to minimise that at the front end. Next, this is an
extract from the environmental impact statement, and next is Bond
Street West.[18]
In blue are the tunnels and the area hatched yellow here is the
station site that is being acquired, so that is being acquired
down to the centre of the earth and up to the heavens, whereas
on the subsoil, if we can go on to the next slide, this is an
illustrative section.[19]
We can see two tunnels here and what we are doing for the subsoil
is acquiring strips of land for the tunnels together with a protective
sleeve around the tunnels. Generally, that is a three-metre protective
sleeve, although vertically it is six metres up, and the reason
for this is to protect the tunnels from future development. We
have shown illustratively piles here coming down and they do bring
loads upon the tunnels and these protective sleeves just ensure
that future development will not impact upon that new infrastructure.
294. MR MOULD: Just before you turn to
another topic, I just want to make clear to the Committee that
you referred a few moments ago to the broad entitlement in relation
to subsoil acquisition and you have mentioned, I think, previous
to that that the material detriment provisions which you described
did not apply to subsoil acquisition only. I should make it clear
that that qualification relates to any subsoil acquisition, it
is not limited to subsoil acquired below that 9 metre limit and
that reflects the position under the Channel Tunnel Rail Link
Act which, as you know, was the most recent hybrid Bill that has
been before this House. I thought I ought to make that clear.
Now, this is a topic which did give rise to debate in the select
committee proceedings in another place and indeed it is raised
in Petitions before their Lordships' House, is it not?
(Mr Smith) Yes, it is. I think the point to make here is
that we are talking about a property where no land is acquired
whatsoever from the owner for the works, but he may be adjoining,
or close to, a worksite where these works are being constructed
and, as a result, may suffer from those works. The point I want
to make is that there are limited rights really in these circumstances
to compensation.[20]
If the public works are undertaken with due care, the Promoters
will obviously seek to minimise interference through those processes
already described through the Code of Construction Practice, the
noise insulation works, the settlement deeds and the general arrangement
of construction activity, but I think the point to make clear
to the Committee is that there are irrecoverable losses in these
cases and those are set out.[21]
An owner from whom no land is acquired for the scheme cannot claim
for business disturbance or loss of trade as a result of construction
activity and he cannot actually claim for the general inconvenience
of construction—the fact that there are workers around the
neighbourhood, for example, or plant in the area. He cannot claim
for the presence or appearance of construction affecting him because
again it may be inconvenient, but he cannot claim for this. The
key thing is whether legal rights are infringed and it is those
that give the right to a common law claim. Now, it may, on the
face of it, seem harsh, but all this does is mirror the rights
of an ordinary owner in the normal case of private development.
If our neighbour builds a house alongside us, we may not like
it, but, if he complies with the law and builds within the agreed
plans and does not trespass, cause a nuisance or infringe our
legal rights, then we may not like it, but he can do it, and this
is the point really with neighbouring property.
295. CHAIRMAN: But it causes a lot of
trouble sometimes, does it not?
(Mr Smith) It does, my Lord, that is quite right. I am being
very honest here; I could say that there are ways in which people
can claim, but I am saying to you that they are limited and I
think it is only fair to make that point. As Mr Mould said, this
was included in the recent review by the Law Commission.
296. MR MOULD: That is right. The Law
Commission in fact recommended no change to the existing law in
relation to this point and obviously the Government accepted that
recommendation.
(Mr Smith) Yes, and, to summarise this, we go to the next
slide.[22]
What a person can claim for is the devaluation of property from
infringement of a property right, and the case is that, if in
this case Crossrail or a body containing compulsory powers actually
undertakes the work in such a way that would give rise to an action
in common law were it not for those statutory powers, in other
words, created a nuisance, trespassed upon land, took land it
had no right to, interfered with access from the highway, so it
did not allow access from the highway, if these sorts of things
happened, then compensation is payable and that mirrors the situation
in the private development arena. If those rights are not infringed—and
we, in Crossrail, very much are planning not to infringe rights
in this way—then compensation will be limited.
297. CHAIRMAN: Which usually occurs in
relation to loss of profits, does it not?
(Mr Smith)
Yes, but, as I have said, my Lord, this is not payable in these
circumstances.
298. I know, but that is the complaint.
(Mr Smith) Absolutely right, yes. Just
to make clear, that if you have no land acquired but still your
property is damaged through settlement due to the construction
of the tunnels, then Crossrail will repair that settlement damage.
299. LORD BROOKE OF ALVERTHORPE: What
happens if you have no land but your mental state is affected
by the construction?
(Mr Smith)
If it is an actionable claim, so Crossrail has been so awful in
its construction—
9 Crossrail Ref: P6, Whole land interest acquired
Commercial Occupier-Residential Owner Occupier (LINEWD-XR3-012) Back
10
Crossrail Ref: P6, Whole land interest acquired Commercial Occupier-Residential
tenant (LINEWD-XR3-013) Back
11
Crossrail Ref: P6, Whole land interest acquired-Site with development
potential (LINEWD-XR3-014) Back
12
Crossrail Ref: P6, Compensation-Part only acquired-Basic Rules
(LINEWD-XR3-015) Back
13
Crossrail Ref: P6, Compensation-Part only acquired-Material Detriment
(LINEWD-XR3-016) Back
14
Crossrail Ref: P6, 21 Moorfields Aerial view 1 (LINEWD-XR3-017) Back
15
Crossrail Ref: P6, 21 Moorfields Location Plan (LINEWD-XR3-018) Back
16
Crossrail Ref: P6, 21 Moorfields Front Block Aerial View 2 (LINEWD-XR3-019) Back
17
Crossrail Ref: P6, Illustrative Claim-Acquisition of Subsoil
Only (LINEWD-XR3-020) Back
18
Crossrail Ref: P6, Bond Street West (LINEWD-XR3-021) Back
19
Crossrail Ref: P6, Illustrative Section-Bond Street Station (LINEWD-XR3-022) Back
20
Crossrail Ref: P6, Construction-No land acquired Neighbouring
Property (LINEWD-XR3-023) Back
21
Crossrail Ref: P6, Construction-No land acquired Neighbouring
Property (continued) (LINEWD-XR3-024) Back
22
Crossrail Ref: P6, Construction-No land acquired Neighbouring
Property (continued) (LINEWD-XR3-025) Back
|
